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Aspects Regarding The Evolution Of Nominal And Real Convergenge Before And After Adhesion To Euro Zone

Author

Listed:
  • Lucian Claudiu ANGHEL

    (College of Management, National University of Political Studies and Public Administration, Bucharest, Romania)

  • Florina PÎNZARU

    (College of Management, National University of Political Studies and Public Administration, Bucharest, Romania)

  • Mihaela DINU

    (College of Management, National University of Political Studies and Public Administration, Bucharest, Romania)

Abstract

This paper presents the analysis of some aspects of nominal and real convergence for 6 countries having adhered to the euro zone until 2013; it is an in-depth analysis of inflation, together with the main components of the consumption basket in the candidate countries. The article will analyse economic competitiveness of Slovenia, Greece, Malta, Cyprus, Estonia and Slovakia, since the adhesion to the euro zone implies giving up the exchange rate policy independence, with an impact on the possibility of further support for price competitiveness. The analysis of competitiveness before adopting the euro (in the framework of the Exchange Rate Mechanism II) will be made based on the market share within the European Union and on the effective real exchange rate. It is important to find out whether adhesion to the euro zone automatically brings an increase of exports competitiveness and an increasing market share within the euro zone for the member states. Competitiveness through the real effective exchange rate will be analysed through consumer prices indexes, the unit cost of work and export prices. The analysis underlines important aspects to be taken into account by every country that could adhere to the euro zone. The choice of the moment for the entry into ERM II is crucial for future candidates to the euro zone, as forcing an early entry could negatively influence their long term economic evolution.

Suggested Citation

  • Lucian Claudiu ANGHEL & Florina PÎNZARU & Mihaela DINU, 2014. "Aspects Regarding The Evolution Of Nominal And Real Convergenge Before And After Adhesion To Euro Zone," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 14, pages 151-161, December.
    • Handle: RePEc:aic:revebs:y:2014:d:14:anghell
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    References listed on IDEAS

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    More about this item

    Keywords

    nominal convergence; real convergence; effective real exchange rate; market share; price competitiveness;
    All these keywords.

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

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